DHL seeks to spur European healthcare industry into action
A new white paper commissioned by DHL, the worlds leading logistics company, examines how changes in t...
A new white paper commissioned by DHL, the world’s leading logistics company, examines how changes in the European healthcare market are impacting supply chain models. The report ‘Adding value and reducing costs: Transforming the European medical device supply chain’ explains what modifications medical device supply chains must undergo in order to survive in today’s new healthcare environment and ensure first-class service for patient care.
The European medical device industry is weathering a perfect storm which is shifting the business paradigm. Value-based healthcare, cost and margin pressures, and increasing regulatory and compliance requirements characterise modern European healthcare operations. These dynamics are forcing manufacturers to reevaluate their supply chain operations to remain competitive, and continue supporting healthcare providers by putting their patients first.
Susanne Amholt, DHL Supply Chain’s Vice President for Business Development, Life Sciences and Healthcare, Europe, said: “The pressures facing the European medical device industry are not new: what’s changing is their intensity and momentum.
“We understand the regulatory and quality assurance environment which is rapidly adding new layers of complexity and cost to the medical device supply chain at a time when pressure to cut costs - from governments, payers, healthcare providers and patients - has never been greater. Meanwhile, there are significant differences in markets and operations.
“Illness patterns in the emerging Eastern European markets are starting to match those in the mature Western European countries, but product preferences, payer mechanisms, regulations and distribution channels continue to differ widely by country. These practices vary country-by-country, making Europe a very complex market to serve.” continued Amholt.
The white paper discusses: the current state of the market; how trends impact the European medical device supply chain; and what new supply chain strategies, practices and solutions are available to address these developments. Outlined in the white paper are four important strategies that medical device and life science companies can implement to address these changes:
- Segmenting supply chains by product value: Segmentation includes tailoring the mode of transportation and warehousing and the distribution channels in each country, according to the type and category of medical device. Low-value, high-volume consumer medical devices may be transported by ocean, long-haul road freight and faster, higher cost modes for 'emergency' situations. From a network perspective, these same products may be distributed via regional distribution centers or cross-dock facilities located in closer proximity to the end market.
- Creating a direct to customer channel: To reduce costs and increase profits, manufacturers are beginning to look at serving certain customers direct. This approach provides an alternative to the traditional distributor-intermediary model and connects businesses more directly with patients. However, the decision of going direct versus through a distributer is highly reliant on several factors, including attributes such as cost of product, security needs and number of final distribution points.
- Leveraging shared-use distribution centers: Under a shared services solution, multiple manufacturers house their product with a single third party logistics service provider (3PL) in a shared network of facilities and transportation capacity, which streamlines the supply chain for manufacturers and their customers.
- Outsourcing logistics to a third party: Outsourcing the logistics activities and operations to a 3PL with expertise in managing medical device supply chains frees up the manufacturer to focus on its core business – developing and producing medical devices. It enhances flexibility by tapping into the capabilities portfolio, infrastructure and expertise of a global 3PL – rather than trying to build and maintain those assets and processes in-house.
The white paper was prepared by Lisa Harrington, President of the lharrington group LLC. She said: “The time has come to re-think the European medical device operating model in general and the supply chain in particular. Leading manufacturers are doing just that. They are working with their logistics service providers to reengineer their supply chains to embrace outsourcing solutions, shared services and other supply chain solutions. Meeting the twin challenges of reducing costs and delivering on service commitments is not an easy task. However, with the right partnerships, it can be done in a manner where everyone wins, including the ultimate customer and the patient.”
DHL’s portfolio of logistics services ranging from national and international parcel delivery, international express, road, air and ocean transport to industrial supply chain management. With more than 325,000 employees in over 220 countries and territories worldwide, they connect people and businesses securely and reliably, enabling global trade flows. DHL is part of Deutsche Post DHL Group. The Group generated revenues of more than €56 billion in 2014.
You can download the ‘Adding value and reducing costs: Transforming the European medical device supply chain’ white paper here: www.dhl.com/eumed-devices
DHL Express Invests in Electric Cargo Plane Fleet
DHL Express has ordered 12 fully electric cargo planes to supercharge efforts in reducing carbon emissions across its US delivery network.
The Alice eCargo planes are manufactured by Seattle startup Eviation, and are designed specifically to be configured for either cargo or passengers. The first planes are expected to be delivered to DHL Express in 2024.
“We have found the perfect partner with Eviation as they share our purpose, and together we will take off into a new era of sustainable aviation,” said John Pearson, CEO of DHL Express.
The purchase forms part of DHL’s €7bn investment in reducing CO2 emissions by 2030, with a zero emissions target set for 2050.
“We firmly believe in a future with zero-emission logistics,” Pearson added. “On our way to clean logistics operations, the electrification of every transport mode plays a crucial role and will significantly contribute to our overall sustainability goal of zero emissions.”
What is Eviation's Alice Aircraft?
- Manufacturer: Eviation
- Capacity: 1,200kg
- Range: 815km
- Charge time: 30 minutes
- Launching: 2024
Eviation’s Alice aircraft enable cargo and passenger airlines to operate zero-emission fleets. The plane can be flown by one pilot and is capable of carrying 1,200kg, with a maximum range of 815km.
The aircraft can be fully charged in 30 minutes, which can take place while the vehicle is loaded and unloaded between flights. Eviation says that, because the aircraft has fewer moving parts - or points of failure - than traditional aircraft, they are more reliable and reduce maintenance overheads and downtime.
“With Alice’s range and capacity, this is a fantastic sustainable solution for our global network,” said Travis Cobb, EVP Global Network Operations and Aviation for DHL Express. “Our aspiration is to make a substantial contribution in reducing our carbon footprint, and these advancements in fleet and technology will go a long way in achieving further carbon reductions.”
How Does Alice Compare with UPS’ eVTOLs?
DHL Express is not alone in electrifying the skies. In April, UPS announced a new fleet of eVTOL (Vertical Takeoff and Landing) aircraft, from Beta Technologies, which will enter service in 2024.
UPS’ vehicles can carry 635kg with a 400km range and cruising speeds of up to 170mph. The eVTOLs can carry cargo to several short-hops or one long route on a single charge, and are aimed at healthcare organisation, SMEs and businesses in small or remote communities.
“These new aircraft will create operational efficiencies in our business, open possibilities for new services, and serve as a foundation for future solutions to reduce the emissions profile of our air and ground operation,” said Juan Perez, UPS Chief Information and Engineering Officer.
The first 10 eVTOLs will be delivered in 2024, with the option for UPS to order up to 150 more.